Anglo American counts cost of African wage strikes

ANGLO American suffered its second consecutive annual loss after the FTSE 100 miner continued to battle bitter industrial disputes, highlighting the scale of the turnaround challenge facing its new chief executive.

Chief executive Mark Cutifani said the weak global economy had hurt commodity prices, adding: “The effects of such a difficult macro-economic environment were exacerbated by operating challenges at key operations and adversarial labour relations in South Africa.” Miners at Anglo’s South African platinum mines are striking over wages.

We have already delivered significant sustainable improvements

Mark Cutifani, Anglo American chief executive

Cutifani took over from former boss Cynthia Carroll last April. Since then he has undertaken a company-wide review and is seeking to axe costs, streamline management and improve operations. And he assured investors that he was on track to deliver.

“While I expect headwinds to continue in 2014 as we reset the business, the benefits of much-improved operational processes and performance will flow through, largely in 2015 and 2016. We have already delivered significant sustainable improvements.”

Analysts were cautiously optimistic, with many pointing out that the loss was an improvement on 2012’s £879million. Broker Investec said: “Anglo has done well out of a tough year and we now expect steady delivery of operating improvements.”

There was also good news from divisions where commodity demand has held up. Copper production surged 24 per cent in the fourth quarter, and at Anglo’s diamond arm, underlying profits spiked 112 per cent to £599million in part due to the weaker rand and improved prices – which are likely to continue rising throughout the rest of the year.